The default risk premium is
A) relevant only for securities issued by very small companies.
B) the additional yield a saver requires for holding a bond with some default risk.
C) zero for corporate bonds, but quite substantial for corporate stock.
D) constant across the business cycle.
B
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Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________. 
A. Rising; A B. Falling; A; C C. Falling; B: C D. Rising; A; C
What is a "debtor nation?" Is the United States a debtor nation?
What will be an ideal response?
Iceland can produce 32 units of food per person per year or 16 units of clothing per person per year, but Lavaland can produce 16 units of food per year or 8 units of clothing. Which of the following is true? a. Iceland has an absolute advantage, but not a comparative advantage in producing food. b. Iceland has a comparative advantage, but not an absolute advantage in producing food. c
Lavaland has both a comparative and absolute advantage in producing clothing. d. Lavaland has a comparative advantage, but not an absolute advantage in producing clothing.
If goods X and Y are complements, the
a. quantities demanded of X and Y tend to move in opposite directions. b. quantities demanded of X and Y tend to move in the same direction. c. prices of X and Y tend to move in the same direction. d. supply curves for X and Y tend to move in the same direction.